A BILL TO BE ENTITLED
AN ACT to modify inmate pharmacy purchasing and monitoring, as recommended by the Joint Legislative program evaluation oversight Committee.
The General Assembly of North Carolina enacts:

Modification and expansion of 340B program to provide for the purchasing of certain inmate medications
SECTION 1.(a)  The University of North Carolina Health Care System (hereinafter "UNCHCS") in cooperation with the Department of Public Safety, Health Services Section (hereinafter "DPS Health Services") shall modify its 340B program regarding its qualification as a Disproportionate Share Hospital. In collaboration with DPS Health Services, UNCHCS shall acquire the necessary approval, if any, from the United States Health Resources and Services Administration (hereinafter "HRSA") to provide inmate medications to inmates with HIV/AIDS and Hepatitis C. UNCHCS and DPS Health Services shall also enter into a Memorandum of Understanding, modifying and creating policies and procedures to guide the processes by which these medications will be obtained. UNCHCS and DPS Health Services shall use telemedicine and the existing infectious disease clinics already housed at Central Prison Healthcare Complex to treat offenders.
SECTION 1.(b)  To facilitate implementation of subsection (a) of this section, the Office of State Budget and Management shall transfer the sum of twenty‑five thousand dollars ($25,000) for the 2018‑2019 fiscal year from DPS to UNCHCS to fund a legal consultant to assist with program design. In addition, seven thousand dollars ($7,000) of DPS Health Services' annual operating budget shall be allocated for program auditing as required by HRSA. It is the intent of the General Assembly that the recurring expenditure for program auditing shall be offset by the savings achieved from 340B participation. In addition, UNCHCS and DPS Health Services shall develop a plan for obtaining additional medications through the 340B program including drugs for treating cancer, neurological conditions, rheumatic diseases, and other costly medical conditions.
SECTION 1.(c)  Beginning October 1, 2019, and quarterly thereafter until a 340B program is in operation for purchasing HIV/AIDS and Hepatitis C medications, UNCHCS and DPS Health Services shall report to the Joint Legislative Oversight Committee on Justice and Public Safety and the Fiscal Research Division on planned actions and accomplishments related to implementing subsections (a) and (b) of this section.
SECTION 1.(d)  Part 2 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑707.5  Annual reports on medication.
Beginning July 1, 2020, and annually thereafter, the University of North Carolina Health Care System and the Department of Public Safety, Health Services Section shall jointly report to the Joint Legislative Oversight Committee on Justice and Public Safety on annual savings achieved from purchasing inmate medications through a 340B program for Disproportionate Share Hospitals as well as any activities conducted or planned to maintain and expand the number of medications purchased through the program."

Revision to medication administration protocol
SECTION 2.  The DPS Health Services Section shall revise its policies and procedures to reflect that any supply of a prescription for the treatment of conditions other than HIV with a per‑supply value of one thousand dollars ($1,000) or more be designated as Direct Observation Therapy. The Department shall report to the Joint Legislative Oversight Committee on Justice and Public Safety by October 1, 2019, regarding the revised policies and procedures.

Collection of data on medications lost during inmate transfer and establishment of internal controls to limit these losses
SECTION 3.(a)  Part 2 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑707.6.  Medication losses related to inmate transfer.
(a)	The Health Services Section shall collect data on medication losses that occur during inmate transfer. The collection methods shall provide, at a minimum, for all of the following:
(1)	A mechanism to easily summarize medication losses across all identified reasons for the loss.
(2)	Information on the prison from which an inmate was transferred.
(3)	Identification of custody officials involved in the transfer.
(b)	The Department shall develop internal controls related to the oversight of medications lost during inmate transfers based on the data collected under subsection (a) of this section. In addition, the Department's Internal Audit unit shall establish an internal oversight function to investigate any medication losses valued at greater than two hundred dollars ($200.00).
(c)	The Department shall also establish disciplinary actions for staff who are found to be responsible for inmate medication losses during transfer. The Health Services Section shall be responsible for addressing disciplinary actions for DPS Health Services prison staff who are found to be responsible for medications lost during inmate transfers and shall refer incidents involving custody staff to the appropriate unit for action."
SECTION 3.(b)  DPS shall initiate an internal audit of its processes for transporting medications during inmate transfer. The audit shall examine all medication losses incurred during Fiscal Year 2018–2019 and shall include recommendations to improve controls and promote accountability for medication losses. DPS shall submit the audit to the Joint Legislative Oversight Committee on Justice and Public Safety by December 1, 2019.

Contract with statewide retail pharmacies, data collection, and oversight mechanism
SECTION 4.(a)  Part 2 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑707.7.  Contract for limited use of local purchase of inmate pharmacy needs.
(a)	By October 31, 2019, the Health Services Section shall award a statewide contract to a private pharmacy for local purchases of limited quantities of medicine and require prison health services staff to use this pharmacy except under extenuating circumstances and with the written approval of the Director of Central Pharmacy.
(b)	The Health Services Section shall obtain monthly electronic invoices of prescriptions filled by each prison from the vendor chosen under subsection (a) of this section and shall develop a mechanism to collect information on purchases made outside the contract. At a minimum, the following information shall be collected for each prescription: (i) the inmate's prison, (ii) the requesting provider, (iii) the medication requested, (iv) the quantity of the medication requested, and (v) the total value of the prescription.
(c)	The Department shall establish a formal oversight mechanism to ensure prescriptions written by providers to be filled at local pharmacies do not exceed the quantities specified in the Department's policy. The Health Services Section central office shall be responsible for implementing the oversight function, shall use the data collected under subsections (a) and (b) of this section to implement the function, and shall implement corrective and disciplinary actions as needed."
SECTION 4.(b)  The Department shall report to the Joint Legislative Oversight Committee on Justice and Public Safety by November 1, 2019, on its efforts to award the contract required under subsection (a) of this section.
SECTION 5.  This act becomes effective July 1, 2019.